"It could be in Denmark's own political interest to respond positively to Washington's request, and it is not excluded that we in the long term might also want to be protected by a missile defense," a government report said.

"For all these reasons, the government is in favour of the American request, but has not yet taken a final decision," the report concluded.

The United States formally asked Denmark in December to allow a technical upgrading of the Cold War-era Thule base, in the northwest of the Arctic island, thought to be one of the major listening posts required for the shield to be operational.

The Danish government is expected to announce its formal decision at the end of April or early May, government officials said.

Danish participation in the National Missile Defense (NMD) project is seen as crucial, but Greenland residents generally oppose the US plan because they fear it will put their island at the centre of a new conflict.

Danish Prime Minister Anders Fogh Rasmussen and his liberal-conservative coalition are known to be favourable to the US plan.

They have stressed the shield's use as a defense weapon, thereby rejecting Greenlanders' concerns that it would increase instability in the world and fears that their participation would make Greenland a target of "rogue" states.

A member of NATO, Copenhagen said it was convinced that it must contribute to the United States' security in order to be in a better position to one day discuss the possibility of a missile defense shield for Europe with NATO allies.

"Security is ensured together, and Denmark benefits from this guarantee of collective security in the Atlantic Alliance," the government said in the report, judging it necessary to "contribute so that it will be as credible as possible."

The Thule base, built in 1951 as an early warning station in the event of a Soviet nuclear missile strike on the West, still provides a surveillance operation for the northern hemisphere.

Britain has already indicated that it will agree to America's request to upgrade an early warning radar station in northern England, also necessary for the NMD to work.